1. Introduction

The Competition Authority (“Authority”) published the Draft Guidelines on Competition Violations in Labor Markets (“Draft Guidelines”) on September 16, 2024.
The Authority stated that the Draft Guidelines aims to set out the basic principles regarding:

• The relevance and significance of conduct between undertakings in labor markets under Law No. 4054 (“Law”);
• The types of infringements that may occur in labor markets within the framework of Article 4 of the Law, how such infringements are/will be assessed by the Competition Board, and the issues that should be taken into consideration by third parties regarding the relevant infringements;
• The criteria under which the ancillary restraint assessment for agreements between competitors in labor markets is/will be conducted;
• To what extent Articles 5, 6 and 7 of the Law can be applied to agreements and actions in labor markets.

In the Draft Guidelines, the Authority first provided a general framework on the current situation. In particular, the Authority stated that the Draft Guidelines aim to set out the basic principles for the assessment of the effects of anticompetitive, distortive and restrictive conduct on labor markets by emphasizing:

• that undertakings compete in labor markets to retain their employees or to employ each other's employees;
• that the structural features of labor markets may prevent the formation of an effective competitive environment;
• the number of employees on the supply side being high, whereas the number of employers on the demand side being limited, and that employee organization remaining weak are factors contributing to this situation;
• that employees are afraid of changing jobs for financial and moral reasons, which reduces the flexibility of supply;
• that, in addition to structural features, undertakings' behaviors that restrict employee mobility also restrict competition and negatively affect the quality and efficient allocation of labor.

2. Rate Setting Agreements

First, the Authority has determined that it is not only the wage that constitutes the remuneration of employees' labor, but also any working conditions that are attributed value by the employees and have an impact on employee mobility. Accordingly, the Authority stated that rate setting agreements can be defined as agreements where undertakings jointly determine the working conditions of their employees, such as wages, wage increases, working hours, fringe benefits, compensation, physical working conditions, leave rights, and non-competition obligations.
Subsequently, the Authority stated that wages and working conditions are considered as costs and/or conditions of purchase that constitute the price within the scope of Article 4 of the Law. The Authority emphasized that agreements to determine these elements are unlawful pursuant to the same article. In this context, it is stated that such agreements constitute a violation in terms of purpose and are considered as cartels.

3. Employee Non- Poaching Agreements

The Authority defines employee non-poaching agreements as agreements, directly or indirectly, whereby an undertaking does not offer or recruit the employees of another undertaking. According to the Authority, such agreements aim to artificially share the labor supply between undertakings. In this context, it is stated that such agreements also constitute an infringement in terms of purpose and are considered as cartels. The Authority also evaluated the situation where such agreements are made through a third party and emphasized that the third party in question may also become a party to the infringement.

4. Knowledge Exchange

The Authority stated that information within the scope of the Draft Guidelines refers to all kinds of data that are directly or indirectly related to the labor force, and information sharing refers to the exchange of such data types between undertakings. In this context, it is stated that the exchange of information may be carried out directly between undertakings or through intermediary institutions.
The Authority emphasized that, for undertakings competing in the labor market, information regarding the working conditions of employees, such as wages, wage increases, working hours, fringe benefits, compensation, physical working conditions, leave rights, etc. are considered as competition-sensitive information. The Authority provided that the exchange of such information may have anticompetitive purposes or effects. According to the Authority, in assessing the anticompetitive effect of the exchange of information, the characteristics of the relevant market, the nature of the information exchanged and the manner of implementation of the exchange of information should be considered.

5. Ancillary Restrictions

The Authority defined ancillary restraints as restrictions imposed on the parties to an agreement that do not have the purpose or effect of preventing, distorting or limiting competition, and which, although they do not constitute the essence of this agreement, are necessary for the realization of the objectives to be achieved by the agreement and are directly related to these objectives.
The Authority emphasized that when assessing whether labor restrictions subject to the main agreements between undertakings that are not anti-competitive are ancillary restraints, it will be examined whether such restrictions are directly related, necessary and proportionate to the main agreement.